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An engineer with a startup company in Houston, TX faces a choice to buy a pump that is either made from stainles steel, carbon steel
An engineer with a startup company in Houston, TX faces a choice to buy a pump that is either made from stainles steel, carbon steel or titanium. The initial cost of capital to buy each of these pumps, their respective annual operating cost and their life are given in the below table. Assume that the Minimum Annual Acceptable rate of interest is 5% compounded monthly, which of these three pumps would you recommend to the engineer to buy? NOTE: Draw the cash flow diagram for each equipment options. , and otherwise call the LCM (Lowest Common Multiple) Method where you for the common years. Conver 2,3 , and 6 years to calculate the Present Worth (PW) for each of the equipment for the common years. Convert the given monthly compounded interest rate to an effective annual interest rate
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